Iran's president-elect says economic problems can't be solved 'overnight'

TEHERAN (AP) - Iran's newly elected reformist-backed president said on Sunday that the country's dire economic problems cannot be solved "overnight", as he took his first steps in consulting with members of the clerically dominated establishment on his new policies.

Mr Hasan Rohani's surprise victory in Friday's elections puts him in charge of an executive branch that traditionally has taken the lead in handling the economy, but nuclear efforts, defence and foreign affairs remain primarily in the hands of the ruling clerics and their powerful protectors, the Revolutionary Guard.

This creates a challenge for Mr Rohani, as Iran suffers from more than 30 per cent inflation as well as 14 per cent unemployment rates linked to Western sanctions for Teheran's suspect nuclear programme. Mr Rohani has called for reaching out to the international community but has little authority over the nuclear activities tied to sanctions.

The semi-official ISNA agency said Mr Rohani discussed inflation and unemployment as well as possible members of his Cabinet with Mr Ali Larijani, speaker for Iran's conservative-dominated Parliament.

"Today, we took the first step for cooperation between two branches of power," Mr Rohani was quoted as saying. He will take office in August, and needs Parliament to approve his proposed nominees for 18 ministries.

Meanwhile, the Revolutionary Guard declared its willingness to cooperate with the President. "We announce our comprehensive readiness for interaction and cooperation with the next administration in the framework of legal duties and assignments," the Guard said on its webpage.

The outward displays of cooperation by Iran's establishment reflect its desire to close the political rift caused by unrest over disputed election results in 2009, and signal to world leaders that the ruling clerics are not publicly standing against Mr Rohani's call for outreach and dialogue with the international community.

Iran's stock exchange meanwhile climbed for the second continuous day. The rise came after a night of a celebration in Teheran, as the announcement of Mr Rohani's victory sent tens of thousands of jubilant supporters into the streets. Cars honked and blared music ranging from patriotic songs to the Lambada.

Riot police, who were frequently deployed on Teheran streets in the run-up to Friday's vote, were conspicuous in their absence. State TV showed footage of the celebrations and rebroadcast a speech he made after his victory was announced on Saturday, asserting Iran's readiness to improve its ties with the world.

The website of the Teheran Stock Exchange said the market jumped 1,194 points by its closure at noon on Sunday, reaching 47,460 from its Saturday close of 46,623, almost a 2.5 per cent increase.

On Saturday, the stock exchange index improved by 2 per cent while Iran's national currency, the rial, strengthened by 9 per cent against the United States dollar.

Foreign currency shops Sunday traded each US dollar for 34,600 rials compared with 36,300 rials on Thursday, the eve of the election.